VME gaining momentum: VITA's new state-of-the-industry whitepaper reveals strong VME market growth
VITA recently released its “2008 State of the VME Technology Industry” whitepaper, which provides a strategic update on the VME industry and a view of the board industry in general terms. The whitepaper, authored by VITA executive director Ray Alderman, covers significant markets, technology, mergers and acquisitions, and VME forecasts, as well as risk management trends for the VME industry.
VME technology is used in critical embedded systems over a wide range of market application segments. Each of these market segments has its own set of characteristics that influences the use of VME technology and VME buying decisions. Alderman says, "The traditional board level markets are in flux and changing, hence the reason for the whitepaper. With the new VME technology, it is showing a sign of maturity including mergers and acquisitions." He added that it was important to take a look at where the different markets segments are and what they are currently doing, as well as the strategic aspects and future of the VME market.
In the whitepaper, Alderman outlines the various markets including MIL/COTS, industrial, telecommunications, and medical. Also highlighted are the VSO's hot new developments of architectural standards in progress. Some include:
- Completion of VPX, a new computing standard combining the latest in connector and packaging technology
- Ruggedized Enhanced Design Implementation (REDI), a new computing standard defining mechanical specifications for cooling and maintenance for embedded computing modules
- Integrated modular chassis standard defining a family of line replaceable integrated electronic assemblies for mobile applications and harsh environments
- New mezzanine standards for changing applications' needs
Alderman predicts, "The market for VME products will grow about 10 percent in 2008 from the current base of $1 billion. A large portion of that growth will be in new VME technologies and in maintaining legacy programs in the MIL/COTS and industrial market segments."
As indicated in the whitepaper, market fragmentation for embedded applications is a challenge that the VME industry has dealt with over the past few years. Research indicates that there are almost 100 different form factors in the embedded board market.
As the board market matures and focuses on a few dominant form factors such as 3U and 6U, the largest companies have the key advantage of economies of scale. On the other hand, smaller companies introduce new form factors to create niches for growth. Alderman expects this market fragmentation by form factor to continue in 2008.
The VSO continues to develop enhancements to VME technology. As mentioned in the whitepaper, these include VXS (VME Switched Serial) and a new revolution in switch fabric and packaging known as VPX (see figure, courtesy of VITA). The VSO is responsible for keeping the VME technologies current and relevant to today's changing market needs. More details on the latest status can be found on the VITA website.
Mergers and acquisitions
The VME technology industry is averaging slightly more than six acquisitions and mergers a year, and this will continue through 2008 according to the whitepaper. Of the 51 transactions tracked by Alderman, 40 percent were in MIL/COTS, 29 percent were in telecommunications, and 31 percent were in industrial market segments.
As indicated in the whitepaper, it was estimated that the VME market grew about 11 to 13 percent in 2007 and is expected to grow by a similar amount in 2008. The VME market demand is about 50 percent MIL/COTS, with 25 percent in high-end industrial applications and 25 percent in all other segments including medical, transportation, and mining/drilling, among others. Approximately 80 percent of the demand for VME32 and VME64 products are for legacy applications.
Summing it all up
Regardless of the accuracy of these specific forecasts and predictions about the future, players in the VME technology industry clearly have a great deal to do to prepare for a future where the only certainty is change itself.
The "2008 State of the VME Technology Industry" whitepaper can be found at http://www.vita.com/mktoverview.html.
For the latest VME technology developments affecting the industry, check out the VMEnow blog at VMEnow.com.